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Bharat Petroleum has become the second Indian refiner to start buying U.S. crude oil, after Bharat purchased 500,000 bpd of Mars and the same amount of Poseidon crude, to be delivered between late September and early October, according to Reuters.
Indian Oil Corp., the country’s top refiner, was the first Indian company to purchase US crude, purchasing 1.6 million barrels of Mars crude last week.
An unnamed source said that the seller was Shell, the operator of the Mars field and the Poseidon pipeline system.
Both deals follow a visit last month by India’s PM Narendra Modi to the U.S., at which President Trump said that the U.S. is looking to expand its international reach by starting oil and gas exports to India. The price of the U.S. sour crude blends that Indian refineries are showing an appetite for is “reasonably competitive,” according the Bharat Petroleum’s head of refineries, R Ramachandran.
So far, India’s biggest suppliers of crude have been Middle Eastern producers, Asian ones, and producers from Africa, but now the world’s third-largest consumer of the commodity is looking to diversify its sources of crude as U.S. and Canadian crude become more competitive after an overhaul at Indian refineries that made heavier crude blends a new favorite since they are cheaper than lighter ones.
The US-India energy cooperation doesn’t stop there—it also includes Indian energy companies signing more than US$30 billion in long-term contracts for U.S.-produced liquefied natural gas, including from Louisiana and Maryland, and an upcoming trade mission of U.S. technologies that can optimize the performance of India’s oil refineries.
U.S. crude oil exports have been on the rise, hitting a record-high 1.3 million bpd in the last week of May, with the average for that month at 1.02 million bpd. Besides Asian nations, European countries and a few South American ones were among the importers of American crude. Canada was the top importer, buying 372,000 bpd from its southern neighbor in May.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.